Managing a workforce is a significant part of business ownership. You must make wise hiring decisions, provide adequate training and comply with state and federal labor laws.
The concept of paying those who work for you probably seems like an obvious legal requirement. However, there are some circumstances under which you must pay an employee who isn’t necessarily performing their specified job duties.
Payroll without performance
Employees can take action against you if you don’t compensate them for their hours worked. In some cases, you could also be liable for withholding payment when employees aren’t working.
- Some travel time is compensable. You generally don’t have to pay your employees to get to work, but if you require them to use a company vehicle or attend a job-related event out of town, they deserve to get paid.
- You must provide compensation when employees clock in, but you don’t have work for them to complete. Exceptions include the failure of public utilities (only non-exempt employees), an Act of God or prohibition by government officials.
- During standby and on-call assignments, workers are considered in your control. The amount of compensation owed may depend on their specific restrictions and requirements during the time they spend waiting for something to which they must respond.
Your workers’ livelihood is in your hands. Therefore, you have both a legal and ethical duty to pay them what they’re owed.
The rate of pay for hours not worked can vary depending on the specific circumstances involved. Mitigate risk by making sure you understand your obligations and conducting your business accordingly.